Solving the Pitfalls of Commissions Disputes

What would improving how your staff handles commissions mean for your business? Would it reduce the number of disputes they handle? Save time in the back-and-forth of understanding what happened, where the mistake is, and what is necessary for resolution? Enhance the relationships that help your business grow?

 

For many medical device manufacturers, the back-and-forth of commissions dispute resolution takes too much time. Dispute resolution is inconvenient, it decreases productivity, and it can damage relationships. Beyond these issues, it’s also critically important to capture who got paid, where, and when—from the financial, legal, and risk management perspective.

 

Why? Because of the Sarbanes-Oxley act and for compliance reasons, many OEMs must have audit traceability for their workforce compensation plans. Compensation structures can vary greatly rep to rep and account to account, and compensation rules can change over time for a variety of reasons. If a compensation rule is changed, it’s critically important to capture who on the OEM’s staff is changing or updating it. Having audit traceability is a key part of a solid auditing trail.

 

Beyond audit traceability, the daily headaches of the commissions process are also big negatives. The process itself, when handled as many companies traditionally do, is error-prone and cumbersome. Many manufacturers and distributors have a variety of compensation structures in place, with contract rules that can vary greatly by rep, territory, and even individual account. Because of this variety, nuances and exceptions can be manifold, driving up the potential for error in calculating any single rep’s monthly commissions, let alone for the full field force. The result is a process that can easily consume dozens (or more) of administrative hours each month. That’s time that could be better spent elsewhere.

 

As if the above reasons weren’t enough, unwelcome “surprises” in the form of lack of visibility from the rep’s end can crop up. These include returns, service fees, and other events that affect commissions fees. And when a rep expects one number, given the month’s activity, and receives one that doesn’t match up, the dispute process begins. The end result is friction that can undermine the relationship between rep, distributor, and manufacturer. When that happens, no one is doing the kind of work that leaves you feeling proud.

 

With all of this doom-and-gloom talk, what’s a smart manufacturer to do to reduce the number and severity of commissions disputes?

 

#1: Record disputes

Capturing the trail of conversation in detail should be the first priority at the outset of a dispute. Without documentation of what the error was—and who is in the wrong—it’s much more difficult to handle a resolution process that satisfies both parties. Emails can cross, threads can bury key details, and heated conversations can spill over to the phone or to IM and other chat tools. Documented back-and-forth made easy by a single channel that captures every detail can result in easier resolutions and less tension between reps and staff.

 

#2: Automate processes

Process automation creates new ways of handling tasks—like the commissions process—using digital tools that free humans to do higher-order work while also reducing the potential for error. Consider the upside of taking something that eats up dozens of administrative hours monthly and transforming it into a process that takes three steps and just a few minutes—with 100% precise results.

 

#3: Enhance visibility

Think of your reps for a moment. With real-time visibility and access to reports and archived data, those nasty month-end surprises could be a thing of the past. So could the amount of time reps spend interacting with your administrative staff to initiate or follow up on dispute resolution. And if and when contract rules and compensation structure changes do happen, enhanced visibility can make it easy to see who made them—and when.

 

Transforming your commissions process offers benefits that counter each of these pitfalls. A tool that enable dispute resolution a single channel keeps staff focused and productive while relieving friction. Process automation saves time and reduces errors. And enhanced visibility can head off disputes before they ever happen, keeping everyone focused on the real work. What would you do with more time and focus—and fewer disputes?

 

ImplantBase is a leader in digital transformation for the orthopedic implant industry. Its platform provides manufacturers of every size with a unique cloud-based solution that transforms how the business operates on every level and across your critical functions of finance, sales, and operations. That means bringing automation—and revolution—to scores of mission-critical business processes, so that your team can stop flailing in chaos and start driving improved performance.

If you’re ready to transform how you handle commissions—and other functions—ImplantBase can help. Give us 30 minutes to assess your performance and help you determine a roadmap to digital transformation—and we will also demo our newly redesigned Commissions module.  

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